Sharp narrows Q3 loss on a weaker yen, staff cuts

Bloomberg

Sat, Feb 02, 2013 - Page 15

Sharp Corp, the Japanese TV maker that has warned about its ability to survive, posted a narrower loss helped by job cuts, asset sales and a weaker yen.

The net loss was ￥36.7 billion (US$398 million) in the three months ended Dec. 31 last year, compared with a loss of ￥174 billion a year earlier, according to a statement yesterday.

The company was expected to report a ￥34 billion loss, based on the average of three analysts’ estimates compiled by Bloomberg.

The firm has shed staff and sold a stake to Qualcomm Inc as it restructures amid slowing TV sales and competition from Samsung Electronics Co.

Sharp and other Japanese exporters have also benefited from a weaker yen, which boosts the repatriated value of overseas sales.

The company said that it expects an annual loss of ￥450 billion, its second straight unprofitable year.

Sharp made an operating profit of ￥2.6 billion in the three months ended Dec. 31 last year.

It had an operating loss of ￥24 billion a year earlier. Third-quarter sales totaled ￥678.2 billion.

Sharp expected to book a ￥25.3 billion one-time charge in the quarter to cut 2,960 jobs, it said on Nov. 20 last year. The following month, it agreed to sell as much as ￥9.9 billion of new shares to Qualcomm. The chipmaker has so far bought ￥4.9 billion as part of the two-step transaction.

Sharp has also discussed selling a stake to Hon Hai Precision Industry Co (鴻烸精密). Hon Hai founder Terry Gou (郭台銘) last year bought a stake in a Sharp LCD plant.

Slower than anticipated sales of Apple Inc’s iPads and iPhone 5 may also have hit Sharp. The US firm is Sharp’s single biggest customer, accounting for 3.4 percent of sales, according to data compiled by Bloomberg.

The firm slowed a production line making iPad screens in December last year, Reuters said last month, citing people it did not identify.

It is also cutting production of iPhone panels this quarter to about 40 percent of capacity from close to 100 percent in the previous three months, the Nikkei said on Jan. 15.

Sharp said it was not the source of the information in the reports.

The company is also in final talks about selling a TV plant in China to Lenovo Group Ltd (聯想) and another in Malaysia to Wistron Corp (緯創), the Nikkei said last month.